New Sallie Mae Credit Cards: Are They Worth It?

Most credit cards are issued by a few major banks such as Citi, American Express, Chase, Bank of America, Capital One and Discover. But recent years have also seen new entrants trying to break through, including Goldman Sachs and its Apple card, as well as several Silicon Valley startups.

In the summer of 2019, Sallie Mae joined the ranks with the launch of three new credit cards aimed at college students and youth. The cards were originally only available to Sallie Mae customers, but are now available to the general public.

Whether you’re a young student contemplating your first credit card or a credit card enthusiast, cards from non-major issuers are always exciting and interesting. You may have heard of Sallie Mae credit cards and are wondering if they are worth it. Read on to learn more about these cards to see if one is right for your circumstances.

Sally Mae’s credit card summary

Sallie Mae currently offers three credit cards, all with no annual fees and cash rewards. These cards are ideal for college students or young adults who have just started earning some income through part-time jobs or summer internships. If that sounds like you, see how the three cards stack up in the table below.

Sally Mae also touts other card features aimed at young people, including full integration with mobile apps that allow customers to easily manage their cards. Additional benefits include zero liability for unauthorized payments and mobile phone protection (up to $600 per claim) if you pay your mobile phone bill with a card.

It also appears that Sallie Mae cards do not require a credit score, so you can probably apply with little to no credit history.

When are Sallie Mae credit cards beneficial?

When you apply for your first credit card

It is clear that these cards are for clients who are just starting to establish their credit. Cashback rewards are good, but nothing special as the best fixed rate cashback cards tend to offer around 2%. But since these cards may not be available to people without a credit history, these Sally Mae cards can fill that void.

Of the three cards, Sallie Mae Ignite Mastercard is the best choice for those who are completely new to credit cards. Not only is that a $50 signup bonus (not exactly generous, but it doesn’t hurt) if you spend $250 over three months, but 0% initial APR on new purchases over six months.

Please note that the introductory annual interest rate does not apply to balance transfers, but newcomers to credit do not have other card debts to transfer in any case. This relatively short APR introductory period is also ideal for larger purchases that students typically make, such as a laptop, printer, or Apple Pencil. It also gives young people some leeway to learn about repayment terms, minimum payments, and the APR before charging them interest.

Sallie Mae Ignite’s no annual fee and low cash back of 1% is also perfect for first-timers. Why is a low cashback rate good for beginners? This does not tempt you to overspending. To teach young cardholders to pay on time, Sally Mae also rewards them with a 25% cashback bonus if they pay on time for six consecutive months.

When you have credit card debt

You may already have a credit card, but you’ve been fascinated by the freedom and ease of reading this plastic. And now you have a small amount of credit card debt. (It’s okay. It happens to the best of us.)

For people with some card debt, the initial 0% APR period on balance transfers for 15 months offered by both Sallie Mae Accelerate and Sallie Mae Evolve will benefit you. You have 60 days to transfer the balance from another credit card and Sally Mae charges you a balance transfer fee of $5 or 3% (whichever is greater). As for the initial period, 15 months is standard among other cards on the market. Not sure if your debt will be repaid within 15 months? If so, use CreditCard.com’s balance transfer calculator to help you plan your payment strategy.

When you have a student loan

Some of you may be funding your college education with student loans, but would also like to improve your credit score now. If so, consider the Sallie Mae Accelerate card. The card gives you a fixed cashback of 1.5% on every purchase you make. However, if you redeem your rewards to pay off your student loan, the card will give you an additional 33.33% on your cash reward rate. This essentially increases your cash back rate to 2% to go towards your student loan.

When are Sallie Mae credit cards not worth it?

When it’s not the first credit card

Unless this is your first rodeo, you don’t need to apply for one of these cards, especially for experienced cardholders with a good credit history (670 and above). You would do better with other cashback cards, earning great cashback rewards on your purchases, as well as expanding your redemption options to include travel, gift cards, and more.

Want to build your credit by paying off your existing debt? You should turn your purchases to the best balance transfer cards, some of which offer 0% introductory APR for periods over 15 months and can earn you some serious rewards.

When you have travel plans

If your upcoming plans include a spring break vacation, a weekend trip home, or a trip abroad to study abroad, you’ll probably want to forego these cards. New cardholders who also want to indulge their wanderlust will not find Sallie Mae cards worth it. The Sallie Mae website does not state whether you can redeem your rewards for trips, and all three cards also charge a 3% international transaction fee. For anyone already planning their next trip, consider looking at student travel cards like the Bank of America Travel Rewards Student Card*.

Should you get a Sallie Mae credit card?

The features of these cards make them attractive to potential clients who are just starting their financial life. If that describes you, then these cards might be worth a look.

As usual, you should search the internet and see if there are other student credit cards that might be better suited to your circumstances. If you’re just starting out, don’t get hung up on rewards. The biggest priority is to make sure you use your credit wisely by paying off your balance in full every month. If you mismanage your finances, late fees and interest can quickly overshadow any meager rewards you may earn.

Keep in mind that if you have a limited credit history, you may not qualify for the best bonus cards. So using starter cards like Sally Mae’s can be a smart approach that will allow you to build up credit over time.

bottom line

Sallie Mae cards are a good choice for young people with no credit history who are buying their first credit card. Anyone hoping for better rewards or different redemption options should look elsewhere. It is important to note that the Sallie Mae website does not mention how you can redeem your rewards, so be sure to read the terms and conditions of your card carefully so you know what you are signing up for.

*All Bank of America Travel Rewards student card information has been independently collected by CreditCards.com and has not been verified or approved by the issuer.

Tony Mesia is a freelance business writer based in Charlotte, North Carolina. In addition to his articles for CreditCards.com, Tony writes for various industry and general publications and companies. As a reporter and editor for the Charlotte Observer, he received the “Best in Business” award from the Society of American Business Editors and Writers for his coverage of air travel and the textile industry.